Tax and SARS knowledge base

Is import VAT paid on customs duty and other charges?

How should an importer approach VAT and other charges on an import?

Last reviewed: 28 August 2026

Direct answer

Import duty, customs value and import VAT are related but they are not the same thing. SARS says VAT is collected on goods imported and cleared for home consumption. A business should not approve a landed-cost calculation or a VAT-return position until it has reviewed the product, tariff classification, customs value, Customs assessment, payment documents, the importer and the intended use of the goods.

SARS provides importer guidance on duties and taxes, its valuation guidance explains that Customs value follows a six-method hierarchy, and its VAT 404 guide explains the taxable-supply and mixed-use principles for input tax. Those areas need to be addressed before an importer makes a broad claim that VAT is or is not charged on a particular amount. The exact result depends on current law, the Customs declaration and the business facts.

What this means in practice

Landed cost is a useful management concept. It may include purchase price, freight, insurance, duty, VAT, handling, clearing fees, storage and internal transport. Customs value is a more specific Customs concept. Customs duty is assessed using the current tariff and other applicable conditions. Import VAT is another tax question. An accounting or procurement report can therefore contain relevant figures without proving the correct Customs or VAT treatment.

Use separate workpapers:

A classification workpaper describes the goods and supports the tariff treatment.
A valuation workpaper explains the Customs value and the evidence for the appropriate method.
A Customs assessment reconciliation compares declarations, assessments and payments to the import file.
A VAT workpaper considers the VAT documentation and intended use before any input-tax treatment is included in the VAT return.

This separation helps prevent a recurring error: someone assumes that a Customs payment document automatically proves a VAT deduction. SARS says a vendor may deduct VAT on goods acquired or imported for taxable supplies, subject to conditions. Where goods have mixed taxable and exempt or other non-taxable use, the VAT 404 guide says input tax is limited to the taxable-use portion and needs apportionment. A clearing agent does not acquire the right to deduct the import VAT simply because it makes the declaration or facilitates payment for its client.

Step-by-step

Build an import file before clearance.

Gather the commercial invoice, purchase order, supplier contract, packing list, bill of lading or airway bill, freight and insurance information, origin evidence, permits and product specifications. Ask the supplier and broker to identify gaps early. Do not wait until month-end to discover that the invoice description cannot support a classification or valuation review.

Confirm the Customs inputs independently.

Check the product description and tariff analysis, current schedule treatment, customs value evidence, currency and declaration procedure. SARS says that valuation methods are applied in a strict hierarchy. Do not use a generic landed-cost spreadsheet as a substitute for that analysis.

Review the Customs declaration and assessment.

Match quantities, product lines, values and importer details to the commercial records. Retain the final declaration, Customs assessment and payment proof. If the clearing agent prepares the declaration, obtain the actual Customs documents rather than relying on a fee invoice alone.

Reconcile the cost ledger.

Reconcile purchase price, Customs amounts, agent fees, transport charges and payment references to the correct import consignment. Keep an exception note for any later invoice, credit note, adjustment or returned goods. Accurate reconciliation makes it much easier to identify an entry error before it becomes a repeat issue.

Obtain a specific VAT review.

Before including an amount in a VAT return, confirm that the principal or importer, tax period, documents and intended use have been reviewed under the current VAT rules. Where goods support both taxable and exempt or other non-taxable activities, do not assume the full amount is recoverable. Directly attribute the intended use first, then apply a current approved apportionment method where the use is mixed. Maintain a clear link from the VAT workpaper back to the Customs and commercial documents.

Monitor changes to the import model.

Revisit the file when the product changes, a new supplier or group company is used, Incoterms change, royalties become payable, the use of the goods changes or the business enters an exempt activity. The data used to set a first landed-cost budget may become unreliable after any of these changes.

Documents and records to keep

Keep product specifications, tariff analysis, current schedule extracts, commercial contracts, invoices, credit notes, payment evidence, freight and insurance records, origin evidence, permits, Customs declarations and assessments. Store all clearing-agent correspondence and instructions.

Keep a separate VAT evidence file with the return workpaper, imported-goods records, intended-use analysis and any apportionment calculation or tax advice. Preserve the reconciliation between the accounting ledger, Customs payment and VAT return. That evidence should be understandable even if the original staff member is unavailable.

Important limits and exceptions

This guide does not set an import VAT rate, calculate an amount or confirm input-tax eligibility. Customs duty rates, valuation rules, Customs procedures and VAT rules are different controls. A rate or formula copied from an old shipment, supplier or online calculator can be wrong for the current import.

Do not assume that import VAT is a permanent cost because it was paid at Customs, or that it is always available as an input-tax deduction because it appears on an assessment. Ask for tailored VAT advice where the recipient, use, tax period or documentation is uncertain.

When to get tailored advice

Get Customs and VAT advice for high-value imports, mixed or exempt-use goods, related-party imports, goods subject to special duties or permits, non-standard Customs procedures, deferred payment arrangements or material declaration changes. Seek help before filing if the assessment, invoice and accounting ledger do not reconcile.

TaxProof can help structure the evidence file and reconcile the transaction trail. We cannot calculate import VAT, approve a VAT deduction or give a Customs valuation ruling.